Enhanced First-Year CCA: Phase-Out After December 31, 2023

Enhanced First-Year CCA: Phase-Out After December 31, 2023

Over the past several years, several incentives permitting enhanced CCA claims in the year property first becomes available for use have been implemented. Claiming the enhanced first-year CCA provides a tax deferral by accelerating the deduction. The phase-out of these incentives will begin for assets that become available for use after December 31, 2023. Immediate expensing property (IEP)Many capital assets, other than those with particularly long lives (such as buildings), are eligible IEP. This includes…

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Enhanced GST Residential Rental Rebate: Increased Incentives

Enhanced GST Residential Rental Rebate: Increased Incentives

On September 14, 2023, the Department of Finance provided details on a proposal to enhance the existing GST rental rebate. In general, the existing rebate provides a 36% rebate of the GST component of the price paid by landlords to construct, or purchase newly constructed, rental property. The existing rebate begins to be phased out for properties valued at over $350,000 and is eliminated at $450,000. The proposal would increase the rebate from 36% to…

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2023 Remuneration

2023 Remuneration

Higher personal income levels are taxed at higher personal rates, while lower levels are taxed at lower rates. Therefore, individuals may want to, where possible, adjust income out of high-income years and into low-income years. This is particularly useful if the taxpayer is expecting a large fluctuation in income due to, for example, an impending:  maternity/paternity leave; large bonus/dividend; or sale of a company or investment assets. In addition to increases in marginal tax rates,…

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Small Business Succession: Many Business Transfers Coming Shortly

Small Business Succession: Many Business Transfers Coming Shortly

The Canadian Federation of Independent Businesses (CFIB) released a report on January 10, 2023, focused on succession expectations for small businesses. It included the following survey responses: 76% of small business owners (constituting $2 trillion in business value) are planning to exit their business in the next 10 years; 9% have a formal business succession plan in place; obstacles to succession planning include: finding a suitable buyer (54%), business valuation (43%), and over-reliance of owner…

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Budget 2023: Top Five Items for Owner-Managers

Budget 2023: Top Five Items for Owner-Managers

Budget 2023 (A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future) was introduced in the House of Commons on March 28, 2023. The top five changes that may impact individuals and owner-managed businesses are as follows: Dental plan – The Canadian Dental Care Plan would be introduced to provide coverage for all uninsured Canadians with an annual family income of less than $90,000 (the previous Canada Dental Benefit only provided benefits for children under…

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One-Time Top-Up to The Canada Housing Benefit: Additional Support

One-Time Top-Up to The Canada Housing Benefit: Additional Support

A one-time tax-free payment of $500, announced in September 2022, is now available to low-income renters. The payment does not reduce other federal income-tested benefits. Eligible individuals must: be 15 years of age or older on December 1, 2022; be resident in Canada for tax purposes in 2022; have filed their 2021 tax return with adjusted net income below $35,000 for families or $20,000 for individuals. If the individual has a spouse or common-law partner,…

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Tips Collected Electronically: Withholding Requirements

Tips Collected Electronically: Withholding Requirements

Where tips are “paid” by an employer, they are pensionable and insurable. In such cases, the employer must also withhold income tax and report the amounts on the employee’s T4. CRA’s current administrative policy is that if the tip is controlled by the employer (controlled tips) and then transferred to the employee, it is considered to be paid by the employer. In contrast, direct tips are considered to have been paid directly by the customer…

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Required Travel: Between Home and Work

Required Travel: Between Home and Work

A June 21, 2022 Tax Court of Canada case considered whether motor vehicle costs of $1,642 associated with a construction foreman’s travel between home and various job sites were deductible against employment income. The taxpayer worked on many of his employer’s 50 projects, located at numerous construction sites. The taxpayer was responsible for ensuring that the workers were in place each morning and were ready to work with properly functioning tools, materials and equipment. This…

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